“Structuring Transactions” Charges Criminalize Innocent People

So if you ever have the opportunity to deposit $10,000 or more in the bank,
you must fill out some extra paperwork or in some way notify the government
about the deposit. And don’t think you can just deposit $5,000 today and then come back tomorrow and deposit the other $5,000 as a way of getting around it — the prosecutors call this “structuring transactions” and it’s illegal.

But what if you just happen to be depositing $5,000 today and another $5,000
tomorrow? How do they know the difference?

Well, it turns out they play hunches… and they sometimes end up beating down some poor schmuck who wasn’t trying to get away with anything but just happened to be making a bunch of smaller deposits.

The IRS
can and does seize bank accounts from people it suspects of structuring
deposits, and then it’s an uphill fight to get the money returned.

This can ruin people who have done nothing wrong, as some recent cases have
shown. Gas station owner Mark Zaniewski had $70,000 seized by the
IRS,
which forced him to close down his station. He was lucky enough to get some
help from the legal team at
Institute
for Justice, since once all your money has been seized, it’s hard to
afford a lawyer, and the courts won’t appoint one for you to fight a civil case.
The IRS
backed down once he got lawyered up.

In another case, supermarket owner Terry Dehko had $35,650 stolen from him by
the IRS.
He tried to explain: “My clerks routinely deposited cash earned at Schott’s at
a bank right across the street. It’s never a good idea to risk letting too
much money accumulate on-site. Like many other small businesses, my store’s
insurance policy specifically limits coverage for cash losses to $10,000.” The
IRS went
through his books and found that he wasn’t trying to hide anything, but they
tried to keep the money anyway. He got help from the Institute, and
eventually got his money back too. But an Institute spokesperson complained:

“The IRS
should not be raiding the bank accounts of innocent Americans, and it should
not take a team of lawyers to put a stop to this behavior… Our constitutional
lawsuit against the federal government seeks to rein in the shameful practice
of civil forfeiture.”

In another recent case,
the government was forced to return $136,000 it had seized from a Chinese
restaurant because the
IRS
missed a court filing deadline (perhaps we can chalk this up to the effects of
the government shutdown).

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